Action plan to increase affordable housing

The government is working on a comprehensive plan of action to help families into home ownership by boosting the supply of affordable houses, Housing Minister Maryan Street said today.

"A package of initiatives was announced by Prime Minister Helen Clark in her annual address to Parliament today and marks the beginning of a bold new direction in housing policy in New Zealand," Maryan Street said.

"House prices are beginning to stabilise, but have nevertheless risen sharply in recent years in New Zealand and in other comparable countries. While this is in some ways a positive reflection of a buoyant economy, the government recognises how hard it is right now for families to buy their first home.

"The Labour-led government is determined to increase housing choices and to reduce cost pressures so more people can realise the Kiwi dream of home ownership. This is best achieved by building greater numbers of modest homes for first home-buyers, which will also help keep prices down more generally.

"Firstly the government plans to develop large scale housing developments involving partnerships between central, regional, and local government, and the private sector, to increase the amount of affordable housing being built. Urban Development Agencies (UDAs) have been set up overseas to develop master-plans for similar large scale projects and we are examining whether these would be appropriate here.

"Regional UDAs in Australia have been used to coordinate faster urban development of large, strategic sites with roles including: land acquisition and amalgamation; fast-tracking regulatory approvals; specification of design, quality standards and affordable housing requirements."

In the future large housing projects, such as those underway in Hobsonville and Tamaki, could be overseen by such an agency, Maryan Street said.

"A review of public land holdings, beginning in Auckland, will also be undertaken to see what new land might be made available for significant housing developments involving a mix of public and private provision."

"Secondly we will support the development of the not-for-profit sector to provide more affordable rental and owner-occupied houses for lower-middle income families or individuals in high cost areas.

"The existing not-for-profit sector is small in scale and caters almost exclusively for those in rental homes with the highest housing needs.

"The change could result in local authorities, iwi and others already working in the not-for-profit sector expanding their role. It could also see the establishment of new dedicated housing entities such as the successful housing associations in the United Kingdom.

"It will take time to increase the numbers of affordable houses through these initiatives, so in the meantime we are launching a shared equity scheme in July for people in high cost areas," Maryan Street said.

"This involves the government taking an equity share in a home, bridging the gap
between a family’s income and the price of a modest house which would otherwise be unaffordable.The scheme will be targeted at the purchase of newly built homes to avoid increasing competition for existing ones.

"The government is also going to re-evaluate some of the regulatory costs which, while not the largest drivers of house price rises, have contributed to them. The government will, for example, look at how to simplify the design and building consent costs for starter homes."

The Affordable Housing: Enabling Territorial Authorities Bill now before Parliament is yet another tool which should soon be available to increase the affordable housing supply in some areas, Maryan Street said.